Turkey has introduced new legislative incentive and support
mechanisms for research and development activities, as well as
extending existing mechanisms. The changes are intended to support
technology and innovation companies, enhance university-industry
cooperation, as well as increase R&D human resources
capacities. The Amendment to the Law on Supporting Research and
Development Activities and Other Laws ("Amendment Law")
was published in Official Gazette number 29636 on 26 February 2015,
entering into effect on 1 March 2016.
The Amendment Law makes changes to the Law on Supporting
Research and Development Activities No. 5746 ("Law No.
5746") and the Law on Technology Development Zones No. 4691
("Law No. 4691").
Design Activities Now Eligible for Incentives and Support
Law No. 5746 is extended to include design activities as being
eligible for incentives and support granted to R&D and
Specialized Technology Development Zones
The concept of "specialized technology development
zones" is introduced to Law No. 4691. These are defined as
"thematic development zones with entrepreneurs operating in
the same sector group, or sub-sectors pertaining to such sector
group". These zones will receive the same support, incentives,
exemptions and exceptions granted to technology development
University – Industry Cooperation
Academic personnel can now be employed in R&D or design
centers as full or part time researchers, designers or
administrative personnel, provided that university committees grant
The Amendment Law also amends the Law on Higher Education No.
2547. Accordingly, revenues from R&D, design and innovation
projects, as well as activities conducted within the scope of
university-industry cooperation must be held in a separate account
within the circulating capital of universities, and are not subject
to any deductions. Also, 85% of the amount payable to academic
personnel are now exempt from tax withholdings.
The Ministry of Science, Industry and Technology
("Ministry") will now provide funds equivalent to the
monthly gross minimum wage, for employees at R&D centers who
have at least an undergraduate degree in mathematics, physics,
chemistry or biology ("Basic Sciences"). The Ministry
will grant these funds for up to two years and the amount is capped
each month at 10% of the total employees working at each R&D
Incentives are re-introduced for R&D and support personnel
regarding income tax withholding:
95% exemption for employees with a doctorate degree in any
field or a master's degree in Basic Sciences.
90% exemption for employees with a master's degree in any
field or an undergraduate degree in Basic Sciences.
80% exemption for other employees.
The salaries of R&D, design and support personnel working at
technology development zones or specialized technology development
zones will be exempt from all taxes until 31 December 2023.
However, overtime work above 45 hours and additional work hours are
not included. The number of support personnel who can benefit from
the incentives for income tax, withholding, and employer's
contribution to insurance premiums, is limited to 10% of the
R&D and design personnel.
Capital Contributions as Incentives
Until 1 December 2023, when calculating commercial earnings and
corporate profits, capital contributions to finance projects in
fields deemed appropriate by the Ministry within specialized
technology development zones or technology development zones will
now be eligible for reductions of up to TRY 500,000 per year.
Reductions are capped at 10% of corporate profits and 20% of the
Tax Exemption for Imported Goods
Goods imported for research purposes in software, R&D,
innovation and design projects within the scope of Law No. 4691 are
now exempt from customs tax and funds. Related transactions have
also become exempt from stamp tax and duties.
Support to Ordering Parties
50% of expenses by R&D or design centers are now eligible
for deductions if the research and development activities are
carried out on an order basis. The ordering party is also eligible
for deductions on the remaining 50% of the expenses. If the
ordering party is not subject to income and corporate taxes, 100%
of the expenses can now be eligible for deductions by the R&D
or design centers and the ordering party may only benefit from
stamp duty exemptions.
Please see this link for the full text of the
Amendment Law (only available in Turkish)
Information first published in the
MA | Gazette, a fortnightly legal update newsletter produced by
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